November 3, 2023

Republican AGs Appeal to the Fifth Circuit on Labor Department’s ESG Investment Rule

Cozen O'Connor

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Cozen O'Connor

A coalition of 25 Republican AGs filed an appeal with the U.S. Court of Appeals for the Fifth Circuit in their lawsuit against the Department of Labor that challenges the implementation of a rule permitting retirement plan fiduciaries to consider environmental, social, and governance (ESG) factors when choosing plan investments.
We previously covered the filing of the AGs’ lawsuit, which argued in part that the new investment rule conflicts with ERISA provisions requiring that fiduciaries make retirement plan investments with the “exclusive purpose” of providing financial benefits to the beneficiaries, and that the DOL exceeded its authority in allowing consideration of nonpecuniary factors with respect to retirement investments.
In September, Judge Matthew Kacsmaryk ruled against the AGs, finding that the new rule did not violate ERISA or exceed the DOL’s authority.

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